How to Dispute a Fraudulent Credit Card Charge

It can be disconcerting to find an unrecognized credit card charge, but disputing questionable transactions is simple when you understand your rights.

Not only is the federal law on your side, but credit card issuers usually have your back, too. Here’s how to dispute credit card charges when it comes to fraud, billing errors, and even unfulfilled merchant promises.

How to Dispute Credit Card Charges Caused By Fraud

If you find a charge you don’t recognize, you should first ask any friends and family if they made the charge without your knowledge. (You’d be surprised how often this happens!)

If they didn’t, it’s likely your card number was compromised. In that case, you should call your credit card issuer immediately so it can freeze or deactivate your card to prevent further fraudulent charges. The issuer will send you a new card with a new card number and CVV.

If you suspect that you’re also a victim of identity theft, and your personal details have been compromised (like your SSN), you should also take steps to freeze your credit reports to prevent anyone from opening up new credit accounts or taking out loans in your name.

Luckily, there’s not much disputing required after taking this step. The Fair Credit Billing Act (FCBA) states that credit card users are only liable for up to $50 in fraudulent charges.

The major credit card networks — Visa, Mastercard, Discover, and American Express — take it a step further by offering “zero liability” policies. This means that in cases of fraud, you won’t have to pay a dime.

After canceling your card, the issuer will send a replacement card with a new account number, and you can get back to your normal life. If you’ve added the card to a digital wallet like Apple Pay, some issuers will update the card there immediately, before you get your new physical card in the mail.

Here are a few extra steps you could take:

File a police report, as it could help other people avoid the same headaches.

If you stored your old card number with shopping websites, or had it linked to automatic payments, update those accounts with the new number.

Even if you think you’re careful with your cards, criminals are always developing new, sophisticated ways to steal card information. Krebs on Security has a great page detailing some of the ways people steal credit card information. Luckily, if you’re the victim of one of these thieves it’s unlikely you’ll be liable for the charges.

How to Dispute Credit Card Charges Caused By Billing Errors

See a double-charge from your favorite sushi restaurant on your statement? Or a $100 charge that should’ve only been $10?

Your first step should always be to contact the merchant. In the name of customer service, it’ll often resolve the issue by refunding your card for the surplus amount.

If the merchant refuses to comply, you can begin the dispute process with your credit card issuer. Here’s what you have to do.

1. Write to Your Credit Card Issuer

Legally, you have 60 days after receiving the erroneous bill to report the mistake to your issuer — in writing.

Although the Federal Trade Commission (FTC) advises sending a letter via certified mail, that’s not always necessary these days. Many card issuers allow you to submit claims through “dispute” buttons on their sites, or by sending notes through their secure message portals.

In your dispute, include as many details as possible about the charge: names, dates, and any proof the charge isn’t yours (though not required by law, it can be helpful). For more guidance, check out the FTC’s sample letter.

The credit card issuer must acknowledge its receipt of your dispute within 30 days. And if the charge is nominal — usually under $25 — you probably won’t have to do anything else. Since it would cost the credit card company more money to open up an investigation, it’ll eat the cost of your disputed purchase, and you can go on your merry way.

Don’t abuse the ability to easily dispute small charges. The card issuer will eventually catch on, and may cancel your account.

2. Wait for Your Issuer’s Decision

With bigger purchases, however, the card issuer has two billing cycles (and a maximum of 90 days) to address your claim with the merchant.

During that time, you shouldn’t pay for the disputed charge — but must pay the rest of your credit card bill on time.

Note the disputed charge will still affect your credit limit. If your credit card has a $2,500 limit, for example, and you’re disputing a $500 charge, you’ll only have $2,000 to spend on your card until the dispute is resolved.

In most cases, credit card issuers will side with the consumer and take the charge off your bill. If it believes the charge is legitimate, however, it’ll support the merchant and make you pay for the charge.

How to Dispute Credit Card Charges Caused By Poor Quality of Goods and Services

Say you paid a plumbing service that never showed up. Or you purchased a TV that doesn’t work. Though you might not know it, credit card companies often have your back when dealing with issues like this.

If you receive goods that are damaged, defective, or not as described — or you didn’t receive the promised goods or services at all — you can request a “chargeback” from your card issuer. (Here’s a list of chargeback reason codes, organized by issuer.)

As with billing errors, you should always dispute the charge with the merchant first. Most want to do the right thing for their customers, and will work with you to find a resolution. Merchants generally want to avoid chargebacks. They’ll often have to pay higher fees to accept credit cards or face other penalties if they get too many.

But if the merchant refuses to cooperate, it’s within your legal rights to request a chargeback from your credit card issuer, as long as the following requirements are met:

The purchase must have been at least $50.

You must have made the purchase in your home state, or within 100 miles of your current billing address.

You must have made a “good faith effort” to resolve the dispute with the merchant.

To be on the safe side, you should request chargebacks within 60 days of the disputed purchase. Contact your credit card issuer via phone or secure message to begin the process.

Some credit cards also offer Purchase Protection, Return Protection, and other benefits. These can can provide reimbursement if eligible purchases are broken or stolen, or if the merchant refuses to take back an item.

Use Your Power Wisely

As you can see, the FTC and credit card companies put a lot of trust in us.

So it’s imperative not to lie or exaggerate. Taking advantage of generous credit card policies — by falsely claiming you never received a product, or by claiming an honest charge was fraudulent — doesn’t benefit anyone.

Not to mention, unnecessary chargebacks cost merchants a lot of money. And, if you request them often, the credit card issuer may decide to close your account permanently.

By wielding our powers wisely, we can continue to enjoy the benefits of the best credit cards for many years to come.

The responses below are not provided or commissioned by bank advertisers. Responses have not been reviewed, approved or otherwise endorsed by bank advertisers. It is not the bank advertisers' responsibility to ensure all posts and/or questions are answered.

Melanie Smith

I’ve wasted over $1300 on Lexington law and got poor results with removing items from my credit report..I was able to remove all the negative items after contacting spaceweb DOT hacks AT gmail DOT com and raise my credit score to 800+, he was able to clear my credit card debts and student loans

omshhaol

Does the Fair Credit Billing Act (FCBA) apply to fraudulent transactions made on a (VISA branded) credit card issued by a non-U.S. bank to a U.S. citizen, when the card got stolen in the U.S., was used to make a fraudulent purchase in the U.S.?

John Ganotis

I’m not sure, but I think it would only apply to cards issued by banks based in the U.S.

omshhaol

Thanks for the quick reply..

I think an argument can be made that with all the elements that do involve the US, that a “federal” law would impose liablity on a non-US bank… Still, while the FTC does have authority to enforce this law on a bank, they aren’t goung to try and collect on tbe card holder’s behalf, instead, any successful “enforcement action” would impose penalties on the foreign.bank, but would then leave the issue of me recovering my losses (due to the fraudulent credit card activity) to me by way of a civil suit whereby I can cite The Fair Credit Billing Act as the basis for legal action against the foreign bank.

I also suspect that I can include a demand for court costs amd attorney fees. The uphill challenge though remains to be serving the foreign bank with court papers.

With all that said, I can offer that I have received preliminary confirmation that VISA’s Fraud Protection Policy generally applies worldwide (to most cards carrying the VISA logo) and more.specifically to th2e type card I have even though it was issued by a non-US bank.

If you’d like, I can update this post as I get through the.process of trying to resolve my case.

John Ganotis

Sure, it may helpful to other readers if you can share your experiences.

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